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Banks could move to offer better interest rates on deposit accounts to avoid sourcing funds from volatile credit markets, ABN Amro banking analyst Jarrod Martin told the Sydney Morning Herald today.
“All the banks have a pretty focused deposit strategy so you’ll see them competing for deposits because it’s a cheaper form of funding,” Mr Martin said.
Jeremy Ooi, financial analyst with Cannex however believes banks would be reluctant to offer better deposit rates because of the penalties levied on consumers for switching accounts.
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“Provided there are going to be changes in the industry it may be easier for consumers to switch institutions and only then will banks start to become more concerned about deposit switching,” he said.
Published: 08-02-08
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